5 finance tips for first time investors


Thinking of purchasing a rental property? If you’re a first-time investor, here are five commonly overlooked costs you may need to budget for.

1. Insulation

A change to the Residential Tenancies Act means all residential rental homes will be required, by law, to have insulation by 1 July 2019.

If you purchase a property that is not adequately insulated you will need to set aside a budget to get the place up to standard. Find out more about your insulation obligations here.

2. Body corporate fees

In addition to covering the mortgage, you’ll be factoring in the costs of insurance and rates. Body corporate fees are another bill you might need to add to your calculations.

A body corporate organise and pay for maintenance and repairs to common areas, for example shared driveways or courtyards. Your annual body corporate fee may also cover things like utility charges for common services like lighting in shared corridors.

Find out how much the annual body corporate fee is and exactly what it covers. You may also need to budget for one-off body corporate charges for unexpected repairs or maintenance to common areas.

3. Leasehold costs

Leasehold is a kind of property ownership that means you own the buildings and any other improvements on a site, but you do not own the land outright. Instead, you lease the land from the land owner and pay ground rent. Because of this, leasehold land is considerable cheaper than purchasing a site outright.

However, while the lease might be affordable at the time you sign on, you must take in to account rent review periods. At this time, the ground rent will be reassessed in comparison to current market values and your costs may increase significantly.

4. Contamination

Methamphetamine contamination is a growing issue for many property investors around New Zealand.

The best way to avoid the heartache – and cost – of dealing with a contaminated property is ensuring you test before you buy.

A meth test will cost you in the neighbourhood of $200-$400, but could save you big money down the track.


5. Disputes

Once you have purchased the property and your tenants have moved in, you might find yourself needing to lodge a dispute with the tenancy tribunal.

Lodging a dispute costs around $20, but the cost of the dispute ending in your tenant’s favour could be much higher.

If you’re a first time investor, hiring a property manager could save you a headache down the track.

It is a property manager’s job to understand your property, your tenants and all the legal obligations that come with being a responsible landlord.


The New Zealand Property Report, published by realestate.co.nz, provides the latest real-time information on the real estate market. Find out more about the country’s property hot spots by reading our latest report here. 

You Might Also Like

NZ Property Report: June 2019

Download the full New Zealand Property Report as a PDF Real-time statistics from realestate.co.nz sh...

Auckland is on the cusp of a buyers’ market

Download the full New Zealand Property Report as a PDF. Auckland is on the cusp of a buyers’ market ...

The Auckland region favours buyers for the first time since 2011

Download the full New Zealand Property Report as a PDF. The Auckland region favours buyers for the f...